PayPal Holdings Inc (PYPL, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance. With its shares currently priced at $78.29, PayPal Holdings Inc has enjoyed a daily gain of 1.99%, and an impressive three-month increase of 29.6%. A detailed analysis, supported by the GF Score, positions PayPal Holdings Inc for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. PayPal Holdings Inc boasts a GF Score of 99, signaling exceptional growth prospects.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 10/10
- Momentum rank: 8/10
Understanding PayPal Holdings Inc's Business
PayPal Holdings Inc, with a market cap of $80.03 billion and annual sales of $31.03 billion, operates with a robust operating margin of 17.54%. Since its spin-off from eBay in 2015, PayPal has been at the forefront of electronic payment solutions, catering to both merchants and consumers primarily through online transactions. As of the end of 2023, the company boasts 426 million active accounts and owns Venmo, a popular person-to-person payment platform.
Financial Strength Breakdown
PayPal Holdings Inc's financial strength is evident in its Financial Strength rank and an impressive Interest Coverage ratio of 15.46. This ratio highlights the company's ability to cover its interest obligations comfortably, a principle highly regarded by the legendary investor Benjamin Graham. Additionally, its strategic debt management is reflected in a favorable Debt-to-Revenue ratio of 0.31.
Profitability Rank Breakdown
The Profitability Rank of PayPal Holdings Inc is outstanding. The company's Operating Margin has shown a consistent increase over the past five years, demonstrating enhanced profitability. The Piotroski F-Score further confirms the company's solid financial health, while its Predictability Rank of 5.0 stars reflects its stable operational performance.
Growth Rank Breakdown
PayPal Holdings Inc is also recognized for its growth, with a Growth rank of 10/10. The company's 3-Year Revenue Growth Rate of 14.2% is notably higher than 60.68% of its peers in the Credit Services industry. This is complemented by a significant increase in EBITDA over recent years, highlighting its ongoing growth capabilities.
Conclusion
Considering PayPal Holdings Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score underscores the company's prime position for potential market outperformance. For investors looking for similar opportunities, the GF Score Screen offers a valuable tool for identifying companies with strong GF Scores.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
